Disney+ Reducing International Originals Output Until Their Technology Improves
Over the past couple of years, we’ve seen Disney drastically reduce the amount of original programming it makes for Disney+ and Hulu, as it looked to make billions of dollars in savings to ensure the streaming division became profitable by the end of 2024.
Disney has released its latest financial details for the end of the year and they’ve been successful in achieving their goal of making its streaming division profitable. They’re also planning on making lots of changes to Disney+ in the future to make it more successful and one area they know they want to improve is with their international originals.
While we’ve seen the overall number of international originals reduced, especially in EMEA (Europe, Middle East & Africa) and APAC (Asia Pacific), Disney is still having success with shows like “Rivals” and “Moving”. During the company’s quarterly financial investors call, Disney CEO Bob Iger shared that he thinks there are plenty of “opportunities, and even the need” for “selective investing outside the United States,” but warned that these should not be considered “enormous by any stretch of the imagination.”
Disney is generally reducing its spending on original content across the board; instead of over $30 billion a year, it has been reduced to $24 billion, most of which is on sports licensing.
One of the issues Iger mentioned as an issue for international originals is that he doesn’t think the technology within Disney+ is at the level it needs to be to allow international originals to work. He stated that Disney was “being careful” about overall international investments “until we get the technology right,” to reduce churn, without going into specifics on what issues are at hand.
The slowdown of international originals has been in the works for a while; as Iger had previously said, “not all countries are equal,” and they wanted to focus on shows and films with a global appeal. Today, Iger reiterated that point:
We feel we have a great hand. But as we look to grow our streaming business, we believe there will be opportunities and even a need for us to do some selective investing outside the United States, notably in EMEA and in APAC. We’ve slowed down our investment in those markets. And in fact, we’re being careful about our overall investment until we get the technology right, until we improve the technology because clearly, if we can use technology to reduce churn, which we’re already doing, then in reality, what we’re doing is we’re increasing return our investment in content.
And we don’t – so we don’t want to spend on the content side until we’re confident that we can get the necessary returns on those investments. But we know as we look to grow our streaming business that prioritizing markets outside the United States with specific content in those markets will be part of that strategy. I don’t think you should consider those investments to be enormous in nature by any stretch of the imagination because we know that we’re making content that has global application. If you look at just the movies that I mentioned as for instance, that work not in all markets, but in most markets. But we don’t have to spend as much as some of our competitors. And as there’s movies – it’s not just the franchise value. As they become more successful, obviously, they drive more value as well.
Roger’s Take: Bob’s comments about international originals was interesting on many levels, especially the technology angle, which isn’t the first time Iger has spoken about wanting to improve the Disney+ homepage experience. They know that the Disney+ homepage isn’t good enough anymore since it’s basically a static page with them curating the experience, rather than how Netflix or YouTube uses an algorithm to recommend content to you to watch.
They obviously feel like the current system isn’t helping their international content reach enough people, or that they want to adjust the homepages to showcase more local content in individual countries. Either way, it doesn’t sound like international originals are a top priority right now, but are likely to be in the future when Disney+ needs to expand further.
Do you think Disney is right to reduce the amount of international originals? Let me know on social media!
Roger Palmer
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